Taxation is not an inflation control tool. Yes, the rate it is set at, what and who is taxed, and how much, will have an anti inflationary effect, but that’s not why we tax. Nor is it something that should be tinkered with. Inflation is a temporary, short term thing. Messing with taxes is as indirect and ineffective as using interest rates to control inflation. The best inflation control mechanism is to directly address the cause of the inflation. That could be act of god, supply collapse, financial speculation, whatever… address the cause, not an aggregate spending constraint.
Our article on MMT addresses this directly and correctly. IN a Nation, that can print its own money…why would the Federal Government ever need to collect taxes? It would not if the tax money was to solely support the Government’s efforts. So, your understanding of taxation is incorrect.
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Taxation is not an inflation control tool. Yes, the rate it is set at, what and who is taxed, and how much, will have an anti inflationary effect, but that’s not why we tax. Nor is it something that should be tinkered with. Inflation is a temporary, short term thing. Messing with taxes is as indirect and ineffective as using interest rates to control inflation. The best inflation control mechanism is to directly address the cause of the inflation. That could be act of god, supply collapse, financial speculation, whatever… address the cause, not an aggregate spending constraint.
Our article on MMT addresses this directly and correctly. IN a Nation, that can print its own money…why would the Federal Government ever need to collect taxes? It would not if the tax money was to solely support the Government’s efforts. So, your understanding of taxation is incorrect.
Control!!